Personal income and spending in the U.S. both increased in the month of July, according to a report released by the Commerce Department on Thursday, with the increases both coming in line with economist estimates.
The report showed that personal income rose by 0.3 percent in July, matching the increases seen in the two previous months. The increase also came in line with estimates.
At the same time, the 0.3 percent increase in income in June was downwardly revised from the 0.5 percent increase that was originally reported.
Disposable personal income, or personal income less personal current taxes, also increased by 0.3 percent in July.
The Commerce Department also said personal spending increased by 0.4 percent in July after coming in roughly flat in June. The spending growth also matched the expectations of economists.
With spending increasing at a slightly faster rate than income, the personal savings rate edged down to 4.2 percent in July from 4.3 percent in June.
Paul Dales, Senior U.S. Economist at Capital Economics, said, "July's U.S. personal income and spending data show there is still life in American consumers."
"Today's data, however, are nowhere near strong enough to prevent the Fed from launching QE3 in mid-September," he added. "What's more, the recent rebound in gasoline prices and the associated drop in consumer confidence suggest that consumption growth will probably slow soon."
The Labor Department released a separate report on Thursday showing that initial jobless claims unexpectedly came in unchanged in the week ended August 25th.
The report said initial jobless claims came in at 374,000, unchanged compared to the previous week's revised figure. Economists had expected jobless claims to edge down to 370,000 from the 372,000 originally reported for the previous week.
by RTT Staff Writer
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